Things you Should Know About Buy to Let Buildings Insurance
If you are looking into investing in a buy to let property, it is important to consider all of the out-of-pocket costs to ensure you are making the best investment possible. With the current international economic crisis, property values around the world have decreased significantly. While these buildings are priced lower than ever, the qualifications to secure buy to let mortgages have become far stricter. For investors who have not been affected by the turbulent economy, now is the time to buy. While buy to let lending has existed throughout the UK since the late nineties, lenders in this type of lending are now requiring proof of income, proof of assets, a hefty down payment and a rental valuation of at least 150% percent of the monthly mortgage payment to approve applicants. In addition to these qualifications, lenders are requiring property owners to secure buy to let building insurance to protect their interest in the property.
Types of Buy to Let Buildings Insurance Coverage Options
If binding insurance for your building is a condition for your loan, most lenders are only concerned with the buildings coverage. Buildings coverage for a property that is being rented to another is very similar the building coverage of your primary residence. The building policy is designed to pay for damages or loss to your property because of fire, theft, vandalism, flooding or subsidence. Anything fixed to the property permanently will be covered. This includes fixtures, cabinets, and other permanent applications.
In addition to the buildings coverage, property owners will have the option to add additional coverage options depending on their needs. If the buy to let property, also referred to as a let out property, is furnished, the property owner may want to purchase contents cover to protect their personal property. Because the mortgage company has no interest in your contents, they will not require you to carry contents coverage. Policies can be customized to protect as much or as little as you want in terms of contents.
Buy to Let buildings insurance policies also include helpful coverage of which many are not aware. The policy will stipulate a limit of cover for emergency assistance services if a contractor must be called out to mitigate a loss from creating more damage. In addition to this, property owners will be protected in the event they have legal issues with problematic tenants or if they are not paid for rent and must evict the tenant.
Where to Purchase Buy to Let Buildings Insurance
Contact an agent or broker dealing in commercial property insurance for a buy to let insurance quote. Because you are earning a monthly income from the properties rents, buy to let buildings are considered a form of business. Compare quotes, coverage options and specialty coverage for peace of mind. While investors can earn a steady income from the purchase of a let out property, maintaining the property and collecting rents is a huge responsibility. Protect yourself against common exposures when you are renting out a residence, and have the peace of mind you need.